1. Calculating Portfolio Betas You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.60 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?

2. Using CAPM A stock has an expected return of 9.8 percent, its beta is .85, and the risk-free rate is 3.6 percent. What must the expected return on the market be?

3. Using CAPM A stock has an expected return of 10.1 percent, a beta of 0.82, and the expected return on the market is 11.5 percent. What must the risk-free rate be?